Calgary-based Husky Energy has begun evaluating the potential to produce and transport natural gas from its White Rose field offshore Newfoundland and Labrador, but said production may be a decade away.

The Canada-Newfoundland Offshore Petroleum Board (C-NOPB) estimates that reserves in the Newfoundland and Labrador offshore area are approximately 2.1 billion bbl of oil and 9.6 Tcf of gas, according to a report issued in May. White Rose has natural gas resources of 2.7 Tcf, according to the C-NOPB. Renewed interest in offshore exploration began last year, following a promising seismic survey in 2002 (see Daily GPI, Oct. 2, 2003).

Husky owns 72.5% of the White Rose offshore development. The oil project has a capital cost of C$2.35 billion and is scheduled to begin oil production by the end of 2005 or early 2006.

“This is the first step which may help realize gas production from White Rose within a decade,” said CEO John C.S. Lau. “In order to evaluate natural gas development in the Jeanne d’Arc Basin, new technologies will need to be developed, and today we believe this is possible.”

Husky will be accepting proposals through June 30 from contractors and engineering firms to assess the key technical, economic and regulatory issues “critical to a safe and reliable” gas development on the Grand Banks. It also is assessing capital and operating costs for the possible development.

After reviewing conceptual designs, Husky said it may select companies to participate in a Request for Proposal process, which would outline the potential project’s broad objectives and expected production numbers.

The initial review of likely technologies indicates that a marine transportation system using compressed natural gas/pressurized natural gas has potential, but Husky officials said they want to consider all of the possibilities.

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